Unemployment and Self-Assessed Health: Evidence from Panel Data

Abstract

We analyse the relationship between unemployment and self-assessed health using the European Community Household Panel (ECHP) for Finland over the period 1996-2001. Our results reveal that the event of becoming unemployed does not matter as such for self-assessed health. The health status of those that end up being unemployed is lower than that of the continually employed. Hence, persons who have poor health are being selected for the pool of the unemployed. This explains why, in a cross-section, unemployment is associated with poor self-assessed health. However, we are somewhat more likely to obtain the negative effects of unemployment on health when long-term unemployment is used as the measure of unemployment experience.

Keywords: health, subjective well-being, unemployment

JEL Classification: I10, J28